Tag Archive: Zardari


Pakistan’s president Zardari has always remained in the line of fire for expensive US trips but now the cost of President Obama’s trip to India @ $200 million a day makes Zardari a true representative president of poor Pakistan. The figure of $200 million is making the rounds among the Obama’s conservative critics, including potential 2012 Obama challenger Mike Huckabee and U.S. Rep. Michele Bachmann (R-Minn.), as the president takes off Friday for a 10-day trip to Asia.

If that is indeed true then we must solute President Zardari for exercising economy and austerity in his trips. But look at the possible outcome of the visit-more business for USA. According to Yahoo News Obama is set to speak to American and Indian business leaders and is expected to announce trade and export deals worth billions to the U.S. In the wake of the Democrats’ devastating midterm losses, attributed in part to the poor state of the U.S. economy, the White House is intent on highlighting concrete benefits to U.S. consumers from Obama’s foray overseas. The president left Washington shortly after the government reported that the economy added 151,000 jobs in October. It wasn’t enough to lower a stubborn 9.6 percent jobless rate and the president said it wasn’t good enough.

“It is hard to overstate the importance of Asia to our economic future,” the president wrote Saturday in an op-ed in The New York Times.

Huckabee made the claim of $200 million a day to Fox News on Tuesday night (citing “reports”) and in the social media sphere. “Reports say that Obama’s trip to Mumbai, India tomorrow will cost taxpayers $200 million dollars a day – come to think of it, that’s much less than Obama’s been spending here,” Huckabee wrote in a Facebook message Tuesday night (misstating the day of Obama’s departure). “So maybe it’s not a bad thing he’s leaving.”

On Wednesday, Bachmann repeated the claim on CNN’s “Anderson Cooper 360.” “Within a day or so the president of the United States will be taking a trip over to India that is expected to cost the taxpayers $200 million a day,” Bachmann told Cooper. “He’s taking 2,000 people with him. He’ll be renting out over 870 rooms in India. And these are five-star hotel rooms at the Taj Mahal Palace hotel. This is the kind of over-the-top spending. It’s a very small example, Anderson.”

The numbers evidently originate with the Press Trust of India, whose report was linked on the Drudge Report and picked up by Fox News host Glenn Beck. The news agency also wrongly said that the White House had blocked off the entire Taj Mahal Palace hotel for Obama’s visit and that the U.S. was stationing 34 warships—roughly 10 percent of the naval fleet–off the coast of Mumbai for security reasons.

The agency attributed the $200 million figure to an anonymous Indian government official. It didn’t attribute the warships claim to any source. Pentagon spokesman Geoff Morrell called the warship claim “absolutely absurd.” “That’s just comical,” he said at Thursday’s Pentagon news briefing.  “Nothing close to that is being done.”

The White House, meanwhile, issued a blanket statement that the $200 million figure “had no basis in reality” and was “wildly inflated.” The press office declined to disclose the trip’s actual cost, citing “security concerns.” In a news briefing Thursday, White House Press Secretary Robert Gibbs also refused to release numbers, but he told reporters point-blank, “We are not spending $200 million a day.”

The nonpartisan FactCheck.org took up the issue, too, saying that even though the administration won’t release a price tag, there is “simply no evidence to support” a claim of $200 million a day. One reason to doubt the report, according to the group:  The entire war in Afghanistan costs $190 million a day.

That is not to say that some of the precautions for Obama’s first presidential visit to India aren’t possibly a tad over the top. As the BBC reports, Indian officials have been removing coconuts from any trees that Obama might walk under, to prevent anything from falling on the presidential head. And as London’s Daily Telegraph notes, the country has deployed trained monkey catchers to prevent any “simian invasion” (a measure that Indian officials also took when President Bush visited in 2006).

 

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Pakistan’s President has announced that his government plans to tax the rich to help the poor i.e. flood-hit people. This sincere initiative is a happy development which should be appreciated but will the rich and mighty pay up or will they live up to their reputation of plundering but not paying back. Pakistan’s floods have placed the country at the head of a bumpy road ahead when the country is forced to make tough choices. To start with, Pakistan’s Central Bank has jacked up the interest rate which will have many implications for the flood-hit fragile economy, but the question is: did the new Governor who is an economist of international standing, have any other viable option? Businessweek in its current issue has reported that Pakistan’s deadliest floods ruined crops alone worth 281.6 billion rupees ($3.27 billion), destroying rice, cotton and sugar. And this is one of multiple official versions this time coming from the horse’s mouth, the Agriculture Minister himself. However, the floods have damaged about 10 million tons of crop, which Credit Suisse values at about $1.9 billion.

In this backdrop when Pakistan’s major contributor to the GDP has suffered so badly, the inflation was already out of control and the Bretton Woods sisters had no mercy on the devastated economy and battered populace, this was probably the only thing in his power that a Central Bank governor could do to arrest the inflationary trends. Wall Street Journal has reported that it’s a decision he had to make with incomplete information. Total assessments of the damage to Pakistan’s economy from floods that began in July are still pending….He chose right. The State Bank of Pakistan on Wednesday raised its policy rate by half a percentage point to 13.5%.

The paper says that holding off would have meant a risky delay of action against a worsening inflation problem. Consumer prices in Pakistan have been rising too fast for three years, with gains close to a 12% rate throughout 2010. The floods will amplify the problem, but floods aren’t the only source of a price shock in Pakistan. Islamabad is under pressure from the International Monetary Fund to increase electricity tariffs and raise general sales taxes and import duties—all of which would add fuel to the inflation problem. Not taking these steps could have the country miss out on a $3.2 billion IMF payment due by the end of this year. Pull it all together and economists at Standard Chartered expect inflation to average 15% in the fiscal year that began in July.

Then there’s the fragile state of Pakistan’s economy. Flood damage means Pakistan’s critical agriculture sector will contract 1.7% this fiscal year, the sector’s first decline in a decade, Credit Suisse predicted. It means economic growth could slow to 2.5%, much slower than last year’s 4.1%, and a crawl by Pakistan’s standards. Add to this the infrastructure damage—from power plants to highways—and industrial growth, too, will suffer. The International Labor Organization estimates 5.3 million people will lose their jobs because of the flood. Raising rates, and promising to keep doing so, in such an environment is certainly not going to win Mr. Kardar any friends in the business community. But inflation is the more frightening of Pakistan’s economic challenges. Price stability is far more critical to Pakistan’s long-term growth. Foreign aid and remittances from overseas Pakistanis will ensure money flows into the economy.